As baby boomers near retirement and the rest of the population steadily marches toward the anticipated end of their careers, more and more workers are starting to ponder on what they can do to improve their chances of a comfortable retirement. However, fewer than half of Americans have calculated how much they need to save for retirement and even fewer are on track to save the funds that they really need to retire.
The average American spends about 20 years enjoying retirement. At the same time, fewer than 30 % of workers with access to retirement plans participated in contributing to those plans. This is alarming considering how many people end up chronically short on funds after they retire. Here are some useful tips to boost your retirement funds and help you on the road to a more enjoyable retirement.
1. Know What You Will Need In Retirement
Experts estimate that most retirees will need at least 70 percent of their preretirement income to maintain an adequate standard of living after they have stopped working. That being said, you should sit down and estimate a reasonable budget that you will need after you retire. Take into account all your expenses and remember that it is always better to overestimate than underestimate. If you need help, sit down with an accountant or a retirement expert. Spending a few dollars to educate yourself and properly prepare could make the difference between poverty and a comfortable retirement.
2. Save, Save, Save
If you’re not saving, it is never too late to start. Begin with small amounts if you have to and try to increase the amount each month. Devise a retirement saving plan, set goals and stick to them.
3. Consider Your Company’s Retirement Savings Plans
If your company or employer offers a retirement savings plan, sign up and contribute as much as you can. The contributions are usually tax deductible and can quickly build up, especially if your employer is matching your funds. If the company you work for has a pension plan available, check to see how it works. Ask for an individual benefit statement to see what your benefit is worth. Speak to your benefits administrator to find out what you are eligible for and what you can do to save.
4. Do Not Touch Retirement Savings Until Retirement
Although it may be tempting, resist the urge to withdraw retirement savings before your retirement. If you withdraw your retirement savings now, you will not only lose principal, interest and tax benefits, but you may also have to pay significant withdrawal penalties.
5. Propose A Retirement Plan If Your Employer Does Not Offer One
If there is no retirement plan available at your company, suggest starting one. Your employer may be able to set up a simplified plan that can help you both and result in many tax benefits.
6. Open An Individual Retirement Account (IRA)
According to tax professionals, you can contribute up to $5,500 a year into an Individual Retirement Account (IRA) without penalties and with significant tax benefits. IRAs can provide an easy way to save and will allow you to automatically deposit each month if you choose.
7. Research Your Social Security Benefits
The Social Security Administration’s Website allows you to estimate your estimated benefits by using the retirement estimator. In general, Social Security pays benefits that are equal to about 40 percent of what you earned before your retirement.
8. Do Not Be Afraid To Ask Questions
Make sure to seek out the information to educate yourself and do not be afraid to ask questions. Saving for retirement does not have to be difficult or confusing. With proper help and guidance you can set yourself up for a successful and comfortable retirement starting today.
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